Climate Change, Carbon Trading, and Energy Finance: Emerging Legal and Regulatory Challenges

A comparative analysis on India and Scotland’s climate governance

Abstract

Climate change presents an urgent and systemic challenge for both developed and developing economies, necessitating legally robust, institutionally credible, and financially viable mechanisms to achieve net-zero targets. India and Scotland offer contrasting, yet complementary approaches to climate governance, particularly in the regulation of carbon trading and energy finance. These jurisdictions have been selected because they represent two distinct models of climate regulation: India is a rapidly developing federal democracy with an emerging domestic carbon market and development-oriented climate policies, whereas Scotland is a devolved jurisdiction within the United Kingdom (UK) that operates under mature statutory climate legislation and participates in UK-wide emissions trading arrangements. This comparison enables an evaluation of how differing constitutional structures, levels of economic development, and regulatory maturity influence the design and implementation of climate governance. This paper undertakes a comparative legal analysis of the climate change frameworks of India and Scotland, examining how regulatory design, market-based mechanisms, and financial instruments are deployed to address climate mitigation goals.